Our long-term goal is to understand how the hematopoietic system is established in the developing embryo. We utilize an in vitro differentiation model system of mouse embryonic stem (ES) cells to address this issue. We have recently identified blast colony forming cells (BL-CFCs) from in vitro differentiated ES cells and demonstrated that they represent the long pursued common progenitor of hematopoietic and endothelial cells, the hemangioblast. Therefore, they are ideal for studying factors and signals regulating the onset of hematopoiesis. A clear understanding of the molecular mechanisms leading to BL-CFC development should unveil the pathway of hematopoietic specification in the developing embryo. We propose the following specific goals: Specific Aim 1: We will further characterize Flk- 1+ cells to define the hemangioblast. We have shown the Flk-1+ cells contain hemangioblasts, a common progenitor of hematopoietic and endothelial cells. Our data suggest that Flk- 1+ cells are heterogeneous and the Flk-1+SCL+ double positive cells represent hemangioblasts. By utilizing immunohistochemistry on total embryoid body (EB) cells or EB sections, we will investigate if Flk-1+ cells are truly heterogeneous. We will further identify markers uniquely expressed on hemangioblasts. This knowledge will help us understand how hemangioblast development is regulated. Specific Aim 2: We will determine molecular mechanisms involved in bFGF- mediated BL-CFC generation. Our data suggest that basic fibroblast growth factor (bFGF) plays a critical role in hemangioblast development. First, bFGF enhances the generation of BL-CFCs and Flk-1+ cells. Second, fgfr-1, a bFGF receptor, gene targeted ES cells are deficient in hemangioblast and hematopoietic differentiation and the expression of both flk-1 and scl is greatly reduced in in vitro differentiated fgfr-1-/- ES cells. Therefore, studies of bFGF-mediated BL-CFC generation should give us a clue how hemangioblast development is regulated. To define the molecular basis of bFGF-mediated hemangioblast generation, we will first determine if the expression of Flk-1 and/or SCL is sufficient and necessary for hemangioblast development. We will also test the hypothesis that the activation of bFGF mesoderm inductive signals is also required for hemangioblast development. This information will elucidate the molecular mechanisms involved in bFGF-mediated BL-CFC development. Specific Aim 3: We will investigate if bFGF, activin A, BMP-2, or BMP-4 could co-regulate hemangioblast development. Our data indicate that bFGF and activin A, singularly or in concert, positively regulate BL-CFC generation. To further define molecular mechanisms leading to hemangioblast development, we will determine if BL-CFC development is subject to interplay of bFGF, activin A, and bone morphogenetic proteins (BMPs). We will also characterize ES cells carrying targeted mutations in genes involved in activin A or BMP mediated signals. This information will further enhance our understanding of hematopoietic development within the embryo.